BIR Ruling No. 510-2020

REPUBLICOF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

VAT-0510-2020 Sec.1091)(H),Tax Code SEP 0 9 2020 BIR Ruling No. 169-2011 VAT Ruling No. 031-03; VAT Ruling No.017-02

Singapore School Manila, Inc. Lots 1 & 40 Block 2 East Street East District ASEANA City, Paranaque 1702

Attention: Ms. Ana Leilani I. Atienza President

Gentlemen:

Singapore School Manila, Inc. from the payment of Value-Added Tax (VAT) under Section 109 (H) of the Tax Code of 1997, as amended, and tax refund/tax credit. This refers to your letters, both dated August 6, 2018, requesting for the exemption of

accredited and recognized by the Department of Education (DepEd) under the following: As represented, Singapore School Manila, Inc. is a private educational institution duly

Recognition/Government Permit No. Date Issued Course/Track

November 5, 2012 April 28, 2016 April 28, 2016 July 15,2015 July 15,2015 Complete Secondary Academic (Accountancy, Complete Elementary Arts and Design Business and Management) Nursery/Kindergarten

provides: In reply, please be informed that Section 109 (H) of the Tax Code of 1997, as amended.

"SEC. 109. Exempt Transactions. --

transactions shall be exempt from the value-added tax. (1) Subject to the provisions of Subsection (2) hereof, the following

X X X X X X X X X

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Authority (TESDA) and those rendered by government educational institutions. " duly accredited by the Department of Education (DepEd), the Commission on Higher Education (CHED), the Technical Education and Skills Development (H) Educational services rendered by private educational institutions.

accredited as such by the Department of Education, the Commission on Higher Education or the operations of educational institutions are exempt from the 12% VAT provided that it is the Technical Education and Skills Development Authority. Pursuant to Section 109 (H) of the Tax Code of 1997, as amended, gross receipts from

but does not include VAT on their purchases of goods and services. Thus, while the school is exempt from VAT on its educational services, it cannot invoke the same exemption privilege to avoid paying VAT on its purchase of goods and/or services even if intended for school amended, only pertains to the educational services rendered by private educational institutions operational use because its exemption covers only taxes for which it is directly liable. It does not cover indirect tax such as V AT on its purchases of goods and services from VAT-registered 2002 and VAT Ruling No. 031-03 dated June 24, 2003). suppliers. The 12% VAT for the purchase of goods and services may be shifted or passed on to the school by its VAT-registered suppliers. Once shifted, the VAT will form part of the cost of the goods and/or services supplied to the school. (VAT Ruling No. 017-02 dated March 20, The VAT exemption provided under Section 109 (H) of the Tax Code of 1997, as

involving its sale of goods and services not in connection with its primary purposes which are subject to the 12% VAT imposed under Sections 106 and 108 of the Tax Code of 1997, as amended, or 3% percentage tax imposed under Section 116 in relation to Section 109 (V) of buyers of such goods and services. (BIR Ruling No. 169-2011 dated May 25, 2011) the same Code if the gross sales or receipts from such sale of goods and services do not exceed Three Million Pesos (P3,000,000.00)' which tax payment may legitimately be passed on to Moreover, the above exemption does not extend to the school's other activities

Singapore School Manila, Inc. is exempt from the payment of VAT under Section 109 (H) of by the Department of Education, this Office hereby holds that educational services rendered by the Tax Code of 1997, as amended. Since Singapore School Manila, Inc. is a private educational institution duly accredited

passed on to Singapore School Manila, Inc. by its VAT-registered suppliers. Once shifted, it payment of VAT is not entitled to. apply for tax refund/tax credit of (excess) input tax. As discussed above, the 12% input VAT for the purchase of goods and services may be shifted or As to the issue of tax refund/tax credit, an educational institution exempt from the

1 R.A. No.10963 increased the VAT threshold from P1,919,500 to P3,000,000 effective January 1, 2018

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Singapore School Manila, Inc. as cost or expense. shall form part of the cost of the goods and/or services purchased and shall be recorded by

if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered null and void. This ruling is being issued on the basis of the foregoing facts as represented. However.

Very truly yours.

iee0&

K-1 Commissioner of Internal Revenue CAESAR R. DULAY 036585